What is a hardship allowance?

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A hardship allowance is a bonus payment made to a person working in difficult conditions. The allowance is typically calculated as a percentage of salary. A job in a particularly difficult area or an area where it is unpleasant to live and work may command an allowance of 30 percent or more.

Hardship allowances are generally applied in situations in which an employee is working as an expatriate, though not exclusively. The United Nations, for example, states that hardship allowances may be paid to staff members in their home countries, as long as they are eligible and meet the conditions for the payment of the allowance. Hardship allowances are greatest in situations that include being sent to a place in which living conditions are poor, there is a vastly different culture or there is reduced access to good health care.

Organizations known to offer hardship allowances include the military and the United Nations. The United Nations states that the elements that determine the value of a hardship allowance are mobility, which varies according to the number of assignments, hardship, which factors in the varying degree of hardship at specific duty stations, and non-removal, which compensates for the non-removal of personal effects and household goods.